1st Quarter 2012

Tennessee International Trade Report

The numbers from China are the most obvious signs of a slowing global trade environment. Tennessee exporters struggled to make headway across much of the world. Beyond China and Japan, East Asia was tough. Exports fell to South Korea by $21 million, to Hong Kong by $6 million, and to Taiwan by $24 million. Southeast Asia was no better. Exports to the ASEAN countries fell by a fifth, to $317 million. Though shipments to Singapore were steady, there were sharp falls to Thailand, the Philippines, and Indonesia. These were the sites of major losses in cotton sales. On the other side of Asia, Tennessee's exporters posted modest gains in the Middle East, entirely due to large sales of cars and aircraft in the Gulf States. The Saudi Arabian market was down 40%.

As might be expected, there were few gains in Europe. The Eurozone's imports of Tennessee goods barely moved, from $1.037 to $1.042 billion. Exports to both France and Germany fell by $1 million, while the Netherlands was off $10 million. The crisis economies of Italy and Spain together purchased $42 million less of Tennessee goods than a year ago. Medical instruments took the brunt of this drop. The rotation of medical and pharmaceutical exports into Belgium continued, giving that country the best numbers for the quarter, but as explained in earlier Trade Reports, these are not increased Tennessee shipments but merely a shift from Luxembourg to Belgium. Outside the Eurozone, things weren't much better in Europe, with exports to the U.K. dropping $2 million, mostly as a result of a fall in Tennessee aircraft-related shipments.

Sectorally, we noted the decline in cotton exports. The only other industries with significant declines for the quarter were the auto parts industry, where the losses were all outside North America, and the printing industry. Perhaps the state's best performer was the computer industry, which managed solid gains across a number of regions and grew by almost 20% for the quarter. The chemical sector continued its recent strong performance, posting a 17% gain. The medical equipment industry also was up, growing by $43 million. The auto industry was basically flat, although shipments of engines and automotive instruments made gains. The latter were pretty much limited to Mexico, however. Most other industrial sectors forged only modest gains for the quarter.